WASHINGTON – The emerging power of the investor class was clearly evident last week in a new poll that shows growing support for President Bush's tax-cutting stimulus plan.
Results of a USA Today/CNN/Gallup Poll, released last week, showed that 52 percent of Americans now believe that cutting taxes is "a good idea" – a 10-point jump from a similar survey taken just two weeks ago.
Several factors contributing to this dramatic shift could signal a dark omen for the Democrats in 2004.
First: As I said, the growing political power of the investor class is weighing in, big time. More than half of all Americans own stock, and "dividends" is not a dirty word to them. Millions of workers have been reinvesting their dividends back into their mutual funds to build retirement nest eggs.
When investors hear the Democrats' tired, old mantra, "tax cuts for the rich," they tune out. They associate investments with wealth. If they are not wealthy now, most hope to become so. Polls show that nearly 40 percent believe they will be wealthier in the near future. Investors know that you need capital to grow the economy, and cutting taxes yields more capital for business expansion and jobs.
Second: The power of the president's bully pulpit and a full-blown White House lobbying campaign nationwide appear to be blunting the Democrats' class warfare attacks. Bush, half a dozen Cabinet secretaries and two dozen other administration officials have been crisscrossing the country, telling anyone who will listen that the tax-cut stimulus plan is about three things: "Jobs, jobs, jobs," as Commerce Secretary Don Evans says at every stop.
Apparently it's working, because the Democrats are sounding frustrated. "It's been difficult for the Democrats to have a debate focused on their proposals. The president has a larger megaphone," AFL-CIO Legislative Director Bill Samuel told me this week.
Third: The Democrats' plan has been virtually invisible. Even when parts of the plan make it to the public, it sounds more like an old New Deal-era, government-spending plan than a 21st-century, market-oriented strategy to unlock investment capital, increase take-home pay and encourage more entrepreneurial risk-taking.
You won't see any of these upward mobility terms in the Democrats' House and Senate plans. "That's not what our base wants to hear," one Democratic adviser told me.
Their plan includes some small, targeted tax cuts for those at or near the bottom of the income ladder and some other tiny tax breaks, but the Democrats' heaviest emphasis is on expanding social welfare and big public-works programs, not on boosting private sector wealth and growth.
Thus, there is more money for extended unemployment compensation, $18 billion more for Medicaid, $26 billion more for transportation projects, more for school funding, but little to spur growth.
Sen. Jay Rockefeller, the ultra-liberal West Virginia Democrat, wants "at least" $30 billion more for aid to state governments that have spent their way into debt.
But more public-works spending and state grants will not pull the United States out of what Treasury Secretary John Snow calls a "soggy" economy. Neither will hand-wringing over deficits, which are the result of anemic growth.
Fourth: Democrats are failing to rally the country behind their pump-priming nostrums because of the party's fundamental misunderstanding of the people who are in the top income brackets. They lump them together under one term -"the rich" - when many are not really that rich.
Two out of every three income tax filers in the highest tax brackets are people who run small businesses, often mom-and-pop operations, according to IRS data. They file 1040 tax returns as individuals, not as corporations.
When will the Democrats understand that the pursuit of wealth is what drives our economy?
Wealth is what ambitious, hard-working Americans aspire to achieve, for themselves and their families. It is at the heart of the American dream. And it is why Bush is slowly but surely winning the political battle for lower tax rates to fuel future long-term growth.